Saturday, March 02, 2019

February 2019 Performance

I was able to squeak out a gain in February despite the negative performance in Constellation Brands, which is the second largest position in the portfolio. Investors didn’t like what they heard with Constellation Brands (Ticker: STZ) at the CAGNY conference and sold off the stock. I didn’t hear anything concerning with Constellation Brands during the CAGNY conference other than a slight down tick in beer growth, which is expected. I like the fact they are focusing on returning ~ $4.5 billion to investors through share buy backs and dividends over the next 3 years. Constellation Brands is a money making machine with significant upside if Canopy Growth works out.

In terms of the merger arb game, I’ve been building a position (long common and short puts) in Spark Therapeutics (Ticker: ONCE), which is being acquired by Roche (Ticker: RHHBY) for $114.50 in cash via a tender offer. This deal should close in early April. I see no antitrust issues so this one should be smooth sailing with a closing within ~ 45 days of announcement.

The way the market is rocketing up, I just hope I can keep pace. I’m not going to chase anything, but just continue to focus on high probability arb plays and let my growth stocks do their thing.


2019 Performance = +11.37% with the running monthly returns as follows:

January +7.4%
February +3.7%

13 Comments:

At March 03, 2019, Anonymous Anonymous said...

Can you list your portfolio stocks?
Thanks

 
At March 03, 2019, Blogger Money Turtle said...

The current holdings are as follows: AAPL, BABA, MA, QGEN, SNY, STZ and V.

 
At March 05, 2019, Anonymous Anonymous said...

ONCE: any news? Odd it’s trading up to 114.

 
At March 05, 2019, Blogger Money Turtle said...

ONCE: I'm wondering as well...

 
At March 05, 2019, Anonymous Anonymous said...

ONCE: FDA commissioner leaving, delay in other gene therapy approval. Value of Approved meds went up?

 
At March 06, 2019, Anonymous Anonymous said...

ONCE: shouldn’t the tender offer have started by now?

 
At March 06, 2019, Blogger Money Turtle said...

ONCE: Roche expects to launch the tender within 10 biz days of deal announcement. So probably this Friday...

 
At March 07, 2019, Blogger Money Turtle said...

Looks like the tender launched today.

 
At March 07, 2019, Anonymous Anonymous said...

Hopefully no bumps till apr 3

 
At March 19, 2019, Anonymous Anonymous said...

ONCE: how can they mess up HSR filing.

 
At March 19, 2019, Blogger Money Turtle said...

They didn’t mess up the filing. The regulators needed additional time for the review so they did a “pull and refile”, which resets the clock for another 15 days. The regulators aren’t given much time to review a tender offer filing. Spark does name Roche as a competitor in the 10K for hemophilia A, but it also names many other competitors as well… This additional time should resolve any questions the regulators may have. This is a very competitive market. I would be surprised if there was a second request.

From Spark’s 10K:

SPK-FVIII. The standard of care for moderate to severe hemophilia A is intravenously administered factor VIII protein or its derivatives. The main competitors with product candidates under development, or approved, to treat hemophilia A include BioMarin Pharmaceutical Inc., Ultragenyx Pharmaceuticals, Inc., in collaboration with Bayer HealthCare, Shire PLC, uniQure N.V., Sangamo Biosciences, Inc. in collaboration with Pfizer, Telethon Institute for Gene Therapy in collaboration with Bioverativ, Inc., Novo Nordisk A/S, Roche Holding AG, and Sanofi.

 
At March 20, 2019, Anonymous Anonymous said...

ONCE: Thanks for the clarification. So they can receive early HSR termination anytime now?

 
At March 20, 2019, Blogger Money Turtle said...

Yes, HSR early termination can be received prior to 4/2. The current HSR deadline is 4/2 (11:59 PM).

 

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